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| Ariziona resident who owned rental property in California dies with taxable estate of approximately $4M. Value of CA property is $1M. Is a CA Form 706 due? It is my understanding that California no longer has an estate tax. Can you also confirm the date the estate tax was repealed?
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Power Member
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The electorate repealed the inheritance tax in 1982. Since then, California could only collect the pickup tax. When did the decedent die?
John Jacobson
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| September 9, 2006 - I looked the CA form up on the web and see that the CA form refers to a pro-ration of a "state death tax "credit" but there is no provision on the Federal Form 706 for a "state death tax credit", only a "state death tax deduction". The Form 706 does not reflect a deduction for any state death tax paid. I fear from your comment there is in fact CA tax due but I don't quite understand. CA property $1,041,500 Other property $2,348,809 Gross estate $3,390,309 Deductions $ 16,144 Taxable estate $3,374,165 State death tax deduction $ 0 Taxable estate $3,374,165 Tax $1,412,916 Unified credit $ 780,800 Net tax $ 632,116
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If you have Guidebook to California Taxes, look at Chapter 16. There is no federal death tax credit in 2006, so there is no California pick up tax to collect. I think Arizona has the same rules.
John Jacobson
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| Thank you very much. That is same conclusion I had arrived at but I was really doubting myself. What a great forum.
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